Section 1

The Legislature shall not, in any manner create any debt
or debts, liability or liabilities, which shall, singly or in the
aggregate with any previous debts or liabilities, exceed the sum of
three hundred thousand dollars ($300,000), except in case of war to
repel invasion or suppress insurrection, unless the same shall be
authorized by law for some single object or work to be distinctly
specified therein which law shall provide ways and means, exclusive
of loans, for the payment of the interest of such debt or liability
as it falls due, and also to pay and discharge the principal of such
debt or liability within 50 years of the time of the contracting
thereof, and shall be irrepealable until the principal and interest
thereon shall be paid and discharged, and such law may make provision
for a sinking fund to pay the principal of such debt or liability to
commence at a time after the incurring of such debt or liability of
not more than a period of one-fourth of the time of maturity of such
debt or liability; but no such law shall take effect unless it has
been passed by a two-thirds vote of all the members elected to each
house of the Legislature and until, at a general election or at a
direct primary, it shall have been submitted to the people and shall
have received a majority of all the votes cast for and against it at
such election; and all moneys raised by authority of such law shall
be applied only to the specific object therein stated or to the
payment of the debt thereby created. Full publicity as to matters to
be voted upon by the people is afforded by the setting out of the
complete text of the proposed laws, together with the arguments for
and against them, in the ballot pamphlet mailed to each elector
preceding the election at which they are submitted, and the only
requirement for publication of such law shall be that it be set out
at length in ballot pamphlets which the Secretary of State shall
cause to be printed. The Legislature may, at any time after the
approval of such law by the people, reduce the amount of the
indebtedness authorized by the law to an amount not less than the
amount contracted at the time of the reduction, or it may repeal the
law if no debt shall have been contracted in pursuance thereof.

Notwithstanding any other provision of this Constitution, Members
of the Legislature who are required to meet with the State Allocation
Board shall have equal rights and duties with the nonlegislative
members to vote and act upon matters pending or coming before such
board for the allocation and apportionment of funds to school
districts for school construction purposes or purposes related
thereto.

Notwithstanding any other provision of this constitution, or of
any bond act to the contrary, if any general obligation bonds of the
State heretofore or hereafter authorized by vote of the people have
been offered for sale and not sold, the Legislature may raise the
maximum rate of interest payable on all general obligation bonds
authorized but not sold, whether or not such bonds have been offered
for sale, by a statute passed by a two-thirds vote of all members
elected to each house thereof.

The provisions of Senate Bill No. 763 of the 1969 Regular Session,
which authorize an increase of the state general obligation bond
maximum interest rate from 5 percent to an amount not in excess of 7
percent and eliminate the maximum rate of interest payable on notes
given in anticipation of the sale of such bonds, are hereby ratified.

Section 1.3

(a) For the purposes of Section 1, a "single object or
work," for which the Legislature may create a debt or liability in
excess of three hundred thousand dollars ($300,000) subject to the
requirements set forth in Section 1, includes the funding of an
accumulated state budget deficit to the extent, and in the amount,
that funding is authorized in a measure submitted to the voters at
the March 2, 2004, statewide primary election.

(b) As used in subdivision (a), "accumulated state budget deficit"
means the aggregate of both of the following, as certified by the
Director of Finance:

(1) The estimated negative balance of the Special Fund for Economic Uncertainties arising on or before June 30, 2004, not including the effect of the estimated amount of net proceeds of any bonds issued or to be issued pursuant to the California Fiscal Recovery Financing Act (Title 17 (commencing with Section 99000) of the Government Code) and any bonds issued or to be issued pursuant to the measure submitted to the voters at the March 2, 2004, statewide primary election as described in subdivision (a).

(2) Other General Fund obligations incurred by the State prior to June 30, 2004, to the extent not included in that negative balance.

(c) Subsequent to the issuance of any state bonds described in
subdivision (a), the State may not obtain moneys to fund a year-end
state budget deficit, as may be defined by statute, pursuant to any
of the following: (1) indebtedness incurred pursuant to Section 1 of
this article, (2) a debt obligation under which funds to repay that
obligation are derived solely from a designated source of revenue, or
(3) a bond or similar instrument for the borrowing of moneys for
which there is no legal obligation of repayment. This subdivision
does not apply to funding obtained through a short-term obligation
incurred in anticipation of the receipt of tax proceeds or other
revenues that may be applied to the payment of that obligation, for
the purposes and not exceeding the amounts of existing appropriations
to which the resulting proceeds are to be applied. For purposes of
this subdivision, "year-end state budget deficit" does not include an
obligation within the accumulated state budget deficit as defined by
subdivision (b).

Section 1.5

The Legislature may create and establish a "General
Obligation Bond Proceeds Fund" in the State Treasury, and may provide
for the proceeds of the sale of general obligation bonds of the
State heretofore or hereafter issued, including any sums paid as
accrued interest thereon, under any or all acts authorizing the
issuance of such bonds, to be paid into or transferred to, as the
case may be, the "General Obligation Bond Proceeds Fund." Accounts
shall be maintained in the "General Obligation Bond Proceeds Fund" of
all moneys deposited in the State Treasury to the credit of that
fund and the proceeds of each bond issue shall be maintained as a
separate and distinct account and shall be paid out only in
accordance with the law authorizing the issuance of the particular
bonds from which the proceeds were derived. The Legislature may
abolish, subject to the conditions of this section, any fund in the
State Treasury heretofore or hereafter created by any act for the
purpose of having deposited therein the proceeds from the issuance of
bonds if such proceeds are transferred to or paid into the "General
Obligation Bond Proceeds Fund" pursuant to the authority granted in
this section; provided, however, that nothing in this section shall
prevent the Legislature from re-establishing any bond proceeds fund
so abolished and transferring back to its credit all proceeds in the
"General Obligation Bond Proceeds Fund" which constitute the proceeds
of the particular bond fund being re-established.

Section 2

(a) No amendment to this Constitution which provides for
the preparation, issuance and sale of bonds of the State of
California shall hereafter be submitted to the electors, nor shall
any such amendment to the Constitution hereafter submitted to or
approved by the electors become effective for any purpose.

Each measure providing for the preparation, issuance and sale of
bonds of the State of California shall hereafter be submitted to the
electors in the form of a bond act or statute.

(b) The provisions of this Constitution enumerated in subdivision
(c) of this section are repealed and such provisions are continued as
statutes which have been approved, adopted, legalized, ratified,
validated, and made fully and completely effective, by means of the
adoption by the electorate of a ratifying constitutional amendment,
except that the Legislature, in addition to whatever powers it
possessed under such provisions, may amend or repeal such provisions
when the bonds issued thereunder have been fully retired and when no
rights thereunder will be damaged.

Section 3

No money shall ever be appropriated or drawn from the State
Treasury for the purpose or benefit of any corporation, association,
asylum, hospital, or any other institution not under the exclusive
management and control of the State as a state institution, nor shall
any grant or donation of property ever be made thereto by the State,
except that notwithstanding anything contained in this or any other
section of the Constitution:

(1) Whenever federal funds are made available for the construction
of hospital facilities by public agencies and nonprofit corporations
organized to construct and maintain such facilities, nothing in this
Constitution shall prevent the Legislature from making state money
available for that purpose, or from authorizing the use of such money
for the construction of hospital facilities by nonprofit
corporations organized to construct and maintain such facilities.

(2) The Legislature shall have the power to grant aid to the
institutions conducted for the support and maintenance of minor
orphans, or half-orphans, or abandoned children, or children of a
father who is incapacitated for gainful work by permanent physical
disability or is suffering from tuberculosis in such a stage that he
cannot pursue a gainful occupation, or aged persons in indigent
circumstances--such aid to be granted by a uniform rule, and
proportioned to the number of inmates of such respective
institutions.

(3) The Legislature shall have the power to grant aid to needy
blind persons not inmates of any institution supported in whole or in
part by the State or by any of its political subdivisions, and no
person concerned with the administration of aid to needy blind
persons shall dictate how any applicant or recipient shall expend
such aid granted him, and all money paid to a recipient of such aid
shall be intended to help him meet his individual needs and is not
for the benefit of any other person, and such aid when granted shall
not be construed as income to any person other than the blind
recipient of such aid, and the State Department of Social Welfare
shall take all necessary action to enforce the provisions relating to
aid to needy blind persons as heretofore stated.

(4) The Legislature shall have power to grant aid to needy
physically handicapped persons not inmates of any institution under
the supervision of the Department of Mental Hygiene and supported in
whole or in part by the State or by any institution supported in
whole or part by any political subdivision of the State.

(5) The State shall have at any time the right to inquire into the
management of such institutions.

(6) Whenever any county, or city and county, or city, or town,
shall provide for the support of minor orphans, or half-orphans, or
abandoned children, or children of a father who is incapacitated for
gainful work by permanent physical disability or is suffering from
tuberculosis in such a stage that he cannot pursue a gainful
occupation, or aged persons in indigent circumstances, or needy blind
persons not inmates of any institution supported in whole or in part
by the State or by any of its political subdivisions, or needy
physically handicapped persons not inmates of any institution under
the supervision of the Department of Mental Hygiene and supported in
whole or in part by the State or by any institution supported in
whole or part by any political subdivision of the State; such county,
city and county, city, or town shall be entitled to receive the same
pro rata appropriations as may be granted to such institutions under
church, or other control.

An accurate statement of the receipts and expenditures of public
moneys shall be attached to and published with the laws at every
regular session of the Legislature.

Section 4

The Legislature shall have the power to insure or guarantee
loans made by private or public lenders to nonprofit corporations
and public agencies, the proceeds of which are to be used for the
construction, expansion, enlargement, improvement, renovation or
repair of any public or nonprofit hospital, hospital facility, or
extended care facility, facility for the treatment of mental illness,
or all of them, including any outpatient facility and any other
facility useful and convenient in the operation of the hospital and
any original equipment for any such hospital or facility, or both.

No provision of this Constitution, including but not limited to,
Section 1 of Article XVI and Section 14 of Article XI, shall be
construed as a limitation upon the authority granted to the
Legislature by this section.

Section 5

Neither the Legislature, nor any county, city and county,
township, school district, or other municipal corporation, shall ever
make an appropriation, or pay from any public fund whatever, or
grant anything to or in aid of any religious sect, church, creed, or
sectarian purpose, or help to support or sustain any school, college,
university, hospital, or other institution controlled by any
religious creed, church, or sectarian denomination whatever; nor
shall any grant or donation of personal property or real estate ever
be made by the State, or any city, city and county, town, or other
municipal corporation for any religious creed, church, or sectarian
purpose whatever; provided, that nothing in this section shall
prevent the Legislature granting aid pursuant to Section 3 of Article
XVI.

Section 6

The Legislature shall have no power to give or to lend, or
to authorize the giving or lending, of the credit of the State, or of
any county, city and county, city, township or other political
corporation or subdivision of the State now existing, or that may be
hereafter established, in aid of or to any person, association, or
corporation, whether municipal or otherwise, or to pledge the credit
thereof, in any manner whatever, for the payment of the liabilities
of any individual, association, municipal or other corporation
whatever; nor shall it have power to make any gift or authorize the
making of any gift, of any public money or thing of value to any
individual, municipal or other corporation whatever; provided, that
nothing in this section shall prevent the Legislature granting aid
pursuant to Section 3 of Article XVI; and it shall not have power to
authorize the State, or any political subdivision thereof, to
subscribe for stock, or to become a stockholder in any corporation
whatever; provided, further, that irrigation districts for the
purpose of acquiring the control of any entire international water
system necessary for its use and purposes, a part of which is
situated in the United States, and a part thereof in a foreign
country, may in the manner authorized by law, acquire the stock of
any foreign corporation which is the owner of, or which holds the
title to the part of such system situated in a foreign country;
provided, further, that irrigation districts for the purpose of
acquiring water and water rights and other property necessary for
their uses and purposes, may acquire and hold the stock of
corporations, domestic or foreign, owning waters, water rights,
canals, waterworks, franchises or concessions subject to the same
obligations and liabilities as are imposed by law upon all other
stockholders in such corporation; and

Provided, further, that this section shall not prohibit any
county, city and county, city, township, or other political
corporation or subdivision of the State from joining with other such
agencies in providing for the payment of workers' compensation,
unemployment compensation, tort liability, or public liability losses
incurred by such agencies, by entry into an insurance pooling
arrangement under a joint exercise of powers agreement, or by
membership in such publicly-owned nonprofit corporation or other
public agency as may be authorized by the Legislature; and

Provided, further, that nothing contained in this Constitution
shall prohibit the use of state money or credit, in aiding veterans
who served in the military or naval service of the United States
during the time of war, in the acquisition of, or payments for, (1)
farms or homes, or in projects of land settlement or in the
development of such farms or homes or land settlement projects for
the benefit of such veterans, or (2) any business, land or any
interest therein, buildings, supplies, equipment, machinery, or
tools, to be used by the veteran in pursuing a gainful occupation;
and

Provided, further, that nothing contained in this Constitution
shall prohibit the State, or any county, city and county, city,
township, or other political corporation or subdivision of the State
from providing aid or assistance to persons, if found to be in the
public interest, for the purpose of clearing debris, natural
materials, and wreckage from privately owned lands and waters
deposited thereon or therein during a period of a major disaster or
emergency, in either case declared by the President. In such case,
the public entity shall be indemnified by the recipient from the
award of any claim against the public entity arising from the
rendering of such aid or assistance. Such aid or assistance must be
eligible for federal reimbursement for the cost thereof.

And provided, still further, that notwithstanding the restrictions
contained in this Constitution, the treasurer of any city, county,
or city and county shall have power and the duty to make such
temporary transfers from the funds in custody as may be necessary to
provide funds for meeting the obligations incurred for maintenance
purposes by any city, county, city and county, district, or other
political subdivision whose funds are in custody and are paid out
solely through the treasurer's office. Such temporary transfer of
funds to any political subdivision shall be made only upon resolution
adopted by the governing body of the city, county, or city and
county directing the treasurer of such city, county, or city and
county to make such temporary transfer. Such temporary transfer of
funds to any political subdivision shall not exceed 85 percent of the
anticipated revenues accruing to such political subdivision, shall
not be made prior to the first day of the fiscal year nor after the
last Monday in April of the current fiscal year, and shall be
replaced from the revenues accruing to such political subdivision
before any other obligation of such political subdivision is met from
such revenue.

Section 7

Money may be drawn from the Treasury only through an
appropriation made by law and upon a Controller's duly drawn warrant.

Section 8

(a) From all state revenues there shall first be set apart
the moneys to be applied by the State for support of the public
school system and public institutions of higher education.

(b) Commencing with the 1990-91 fiscal year, the moneys to be
applied by the State for the support of school districts and
community college districts shall be not less than the greater of the
following amounts:

(1) The amount which, as a percentage of General Fund revenues which may be appropriated pursuant to Article XIIIB, equals the percentage of General Fund revenues appropriated for school districts and community college districts, respectively, in fiscal year 1986-87.

(2) The amount required to ensure that the total allocations to school districts and community college districts from General Fund proceeds of taxes appropriated pursuant to Article XIIIB and allocated local proceeds of taxes shall not be less than the total amount from these sources in the prior fiscal year, excluding any revenues allocated pursuant to subdivision (a) of Section 8.5, adjusted for changes in enrollment and adjusted for the change in the cost of living pursuant to paragraph (1) of subdivision (e) of Section 8 of Article XIIIB. This paragraph shall be operative only in a fiscal year in which the percentage growth in California per capita personal income is less than or equal to the percentage growth in per capita General Fund revenues plus one half of one percent.

(3) (A) The amount required to ensure that the total allocations to school districts and community college districts from General Fund proceeds of taxes appropriated pursuant to Article XIIIB and allocated local proceeds of taxes shall equal the total amount from these sources in the prior fiscal year, excluding any revenues allocated pursuant to subdivision (a) of Section 8.5, adjusted for changes in enrollment and adjusted for the change in per capita General Fund revenues.

(B) In addition, an amount equal to one-half of one percent times the prior year total allocations to school districts and community colleges from General Fund proceeds of taxes appropriated pursuant to Article XIIIB and allocated local proceeds of taxes, excluding any revenues allocated pursuant to subdivision (a) of Section 8.5, adjusted for changes in enrollment.

(C) This paragraph (3) shall be operative only in a fiscal year in which the percentage growth in California per capita personal income in a fiscal year is greater than the percentage growth in per capita General Fund revenues plus one half of one percent.

(c) In any fiscal year, if the amount computed pursuant to
paragraph (1) of subdivision (b) exceeds the amount computed pursuant
to paragraph (2) of subdivision (b) by a difference that exceeds one
and one-half percent of General Fund revenues, the amount in excess
of one and one-half percent of General Fund revenues shall not be
considered allocations to school districts and community colleges for
purposes of computing the amount of state aid pursuant to paragraph
(2) or 3 of subdivision (b) in the subsequent fiscal year.

(d) In any fiscal year in which school districts and community
college districts are allocated funding pursuant to paragraph (3) of
subdivision (b) or pursuant to subdivision (h), they shall be
entitled to a maintenance factor, equal to the difference between (1)
the amount of General Fund moneys which would have been appropriated
pursuant to paragraph (2) of subdivision (b) if that paragraph had
been operative or the amount of General Fund moneys which would have
been appropriated pursuant to subdivision (b) had subdivision (b) not
been suspended, and (2) the amount of General Fund moneys actually
appropriated to school districts and community college districts in
that fiscal year.

(e) The maintenance factor for school districts and community
college districts determined pursuant to subdivision (d) shall be
adjusted annually for changes in enrollment, and adjusted for the
change in the cost of living pursuant to paragraph (1) of subdivision
(e) of Section 8 of Article XIIIB, until it has been allocated in
full. The maintenance factor shall be allocated in a manner
determined by the Legislature in each fiscal year in which the
percentage growth in per capita General Fund revenues exceeds the
percentage growth in California per capita personal income. The
maintenance factor shall be reduced each year by the amount allocated
by the Legislature in that fiscal year. The minimum maintenance
factor amount to be allocated in a fiscal year shall be equal to the
product of General Fund revenues from proceeds of taxes and one-half
of the difference between the percentage growth in per capita General
Fund revenues from proceeds of taxes and in California per capita
personal income, not to exceed the total dollar amount of the
maintenance factor.

(f) For purposes of this section, "changes in enrollment" shall be
measured by the percentage change in average daily attendance.
However, in any fiscal year, there shall be no adjustment for
decreases in enrollment between the prior fiscal year and the current
fiscal year unless there have been decreases in enrollment between
the second prior fiscal year and the prior fiscal year and between
the third prior fiscal year and the second prior fiscal year.

(h) Subparagraph (B) of paragraph (3) of subdivision (b) may be
suspended for one year only when made part of or included within any
bill enacted pursuant to Section 12 of Article IV. All other
provisions of subdivision (b) may be suspended for one year by the
enactment of an urgency statute pursuant to Section 8 of Article IV,
provided that the urgency statute may not be made part of or included
within any bill enacted pursuant to Section 12 of Article IV.

Section 8.5

(a) In addition to the amount required to be applied for
the support of school districts and community college districts
pursuant to Section 8, the Controller shall during each fiscal year
transfer and allocate all revenues available pursuant to paragraph 1
of subdivision (a) of Section 2 of Article XIIIB to that portion of
the State School Fund restricted for elementary and high school
purposes, and to that portion of the State School Fund restricted for
community college purposes, respectively, in proportion to the
enrollment in school districts and community college districts
respectively.

(1) With respect to funds allocated to that portion of the State School Fund restricted for elementary and high school purposes, no transfer or allocation of funds pursuant to this section shall be required at any time that the Director of Finance and the Superintendent of Public Instruction mutually determine that current annual expenditures per student equal or exceed the average annual expenditure per student of the 10 states with the highest annual expenditures per student for elementary and high schools, and that average class size equals or is less than the average class size of the 10 states with the lowest class size for elementary and high schools.

(2) With respect to funds allocated to that portion of the State School Fund restricted for community college purposes, no transfer or allocation of funds pursuant to this section shall be required at any time that the Director of Finance and the Chancellor of the California Community Colleges mutually determine that current annual expenditures per student for community colleges in this State equal or exceed the average annual expenditure per student of the 10 states with the highest annual expenditures per student for community colleges.

(b) Notwithstanding the provisions of Article XIIIB, funds
allocated pursuant to this section shall not constitute
appropriations subject to limitation.

(c) From any funds transferred to the State School Fund pursuant
to subdivision (a), the Controller shall each year allocate to each
school district and community college district an equal amount per
enrollment in school districts from the amount in that portion of the
State School Fund restricted for elementary and high school purposes
and an equal amount per enrollment in community college districts
from that portion of the State School Fund restricted for community
college purposes.

(d) All revenues allocated pursuant to subdivision (a) shall be
expended solely for the purposes of instructional improvement and
accountability as required by law.

(e) Any school district maintaining an elementary or secondary
school shall develop and cause to be prepared an annual audit
accounting for such funds and shall adopt a School Accountability
Report Card for each school.

Section 9

Money collected under any state law relating to the
protection or propagation of fish and game shall be used for
activities relating thereto.

Section 10

Whenever the United States government or any officer or
agency thereof shall provide pensions or other aid for the aged,
co-operation by the State therewith and therein is hereby authorized
in such manner and to such extent as may be provided by law.

The money expended by any county, city and county, municipality,
district or other political subdivision of this State made available
under the provisions of this section shall not be considered as a
part of the base for determining the maximum expenditure for any
given year permissible under Section 20 of Article XI of this
Constitution independent of the vote of the electors or authorization
by the State Board of Equalization.

Section 11

The Legislature has plenary power to provide for the
administration of any constitutional provisions or laws heretofore or
hereafter enacted concerning the administration of relief, and to
that end may modify, transfer, or enlarge the powers vested in any
state agency or officer concerned with the administration of relief
or laws appertaining thereto. The Legislature, or the people by
initiative, shall have power to amend, alter, or repeal any law
relating to the relief of hardship and destitution, whether such
hardship and destitution results from unemployment or from other
causes, or to provide for the administration of the relief of
hardship and destitution, whether resulting from unemployment or from
other causes, either directly by the State or through the counties
of the State, and to grant such aid to the counties therefor, or make
such provision for reimbursement of the counties by the State, as
the Legislature deems proper.

Section 13

Notwithstanding any other provision of this Constitution,
the Legislature shall have power to release, rescind, cancel, or
otherwise nullify in whole or in part any encumbrance on property,
personal obligation, or other form of security heretofore or
hereafter exacted or imposed by the Legislature to secure the
repayment to, or reimbursement of, the State, and the counties or
other agencies of the state government, of aid lawfully granted to
and received by aged persons.

Section 14

The Legislature may provide for the issuance of revenue
bonds to finance the acquisition, construction, and installation of
environmental pollution control facilities, including the acquisition
of all technological facilities necessary or convenient for
pollution control, and for the lease or sale of such facilities to
persons, associations, or corporations, other than municipal
corporations; provided, that such revenue bonds shall not be secured
by the taxing power of the State; and provided, further, that the
Legislature may, by resolution adopted by either house, prohibit or
limit any proposed issuance of such revenue bonds. No provision of
this Constitution, including, but not limited to, Section 25 of
Article XIII and Sections 1 and 2 of Article XVI, shall be construed
as a limitation upon the authority granted to the Legislature
pursuant to this section. Nothing herein contained shall authorize
any public agency to operate any industrial or commercial enterprise.

Section 14.5

The Legislature may provide for the issuance of revenue
bonds to finance the acquisition, construction, and installation of
facilities utilizing cogeneration technology, solar power, biomass,
or any other alternative source the Legislature may deem appropriate,
including the acquisition of all technological facilities necessary
or convenient for the use of alternative sources, and for the lease
or sale of such facilities to persons, associations, or corporations,
other than municipal corporations; provided, that such revenue bonds
shall not be secured by the taxing power of the State; and provided,
further, that the Legislature may, by resolution adopted by both
houses, prohibit or limit any proposed issuance of such revenue
bonds. No provision of this Constitution, including, but not limited
to, Sections 1, 2, and 6, of this article, shall be construed as a
limitation upon the authority granted to the Legislature pursuant to
this section. Nothing contained herein shall authorize any public
agency to operate any industrial or commercial enterprise.

Section 15

A public body authorized to issue securities to provide
public parking facilities and any other public body whose territorial
area includes such facilities are authorized to make revenues from
street parking meters available as additional security.

Section 16

All property in a redevelopment project established under
the Community Redevelopment Law as now existing or hereafter amended,
except publicly owned property not subject to taxation by reason of
that ownership, shall be taxed in proportion to its value as provided
in Section 1 of this article, and those taxes (the word "taxes" as
used herein includes, but is not limited to, all levies on an ad
valorem basis upon land or real property) shall be levied and
collected as other taxes are levied and collected by the respective
taxing agencies.

The Legislature may provide that any redevelopment plan may
contain a provision that the taxes, if any, so levied upon the
taxable property in a redevelopment project each year by or for the
benefit of the State of California, any city, county, city and
county, district, or other public corporation (hereinafter sometimes
called "taxing agencies") after the effective date of the ordinance
approving the redevelopment plan, shall be divided as follows:

(a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of those taxing agencies upon the total sum of the assessed value of the taxable property in the redevelopment project as shown upon the assessment roll used in connection with the taxation of that property by the taxing agency, last equalized prior to the effective date of the ordinance, shall be allocated to, and when collected shall be paid into, the funds of the respective taxing agencies as taxes by or for those taxing agencies on all other property are paid (for the purpose of allocating taxes levied by or for any taxing agency or agencies which did not include the territory in a redevelopment project on the effective date of the ordinance but to which that territory has been annexed or otherwise included after the ordinance's effective date, the assessment roll of the county last equalized on the effective date of that ordinance shall be used in determining the assessed valuation of the taxable property in the project on that effective date); and

(b) Except as provided in subdivision (c), that portion of the levied taxes each year in excess of that amount shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on loans, moneys advanced to, or indebtedness (whether funded, refunded, assumed or otherwise) incurred by the redevelopment agency to finance or refinance, in whole or in part, the redevelopment project. Unless and until the total assessed valuation of the taxable property in a redevelopment project exceeds the total assessed value of the taxable property in the project as shown by the last equalized assessment roll referred to in subdivision (a), all of the taxes levied and collected upon the taxable property in the redevelopment project shall be paid into the funds of the respective taxing agencies. When the loans, advances, and indebtedness, if any, and interest thereon, have been paid, then all moneys thereafter received from taxes upon the taxable property in the redevelopment project shall be paid into the funds of the respective taxing agencies as taxes on all other property are paid.

(c) That portion of the taxes identified in subdivision (b) which are attributable to a tax rate levied by a taxing agency for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness for the acquisition or improvement of real property shall be allocated to, and when collected shall be paid into, the fund of that taxing agency. This paragraph shall only apply to taxes levied to repay bonded indebtedness approved by the voters of the taxing agency on or after January 1, 1989.

The Legislature may also provide that in any redevelopment plan or
in the proceedings for the advance of moneys, or making of loans, or
the incurring of any indebtedness (whether funded, refunded,
assumed, or otherwise) by the redevelopment agency to finance or
refinance, in whole or in part, the redevelopment project, the
portion of taxes identified in subdivision (b), exclusive of that
portion identified in subdivision (c), may be irrevocably pledged for
the payment of the principal of and interest on those loans,
advances, or indebtedness.

It is intended by this section to empower any redevelopment
agency, city, county, or city and county under any law authorized by
this section to exercise the provisions hereof separately or in
combination with powers granted by the same or any other law relative
to redevelopment agencies. This section shall not affect any other
law or laws relating to the same or a similar subject but is intended
to authorize an alternative method of procedure governing the
subject to which it refers.

The Legislature shall enact those laws as may be necessary to
enforce the provisions of this section.

Section 17

The State shall not in any manner loan its credit, nor
shall it subscribe to, or be interested in the stock of any company,
association, or corporation, except that the State and each political
subdivision, district, municipality, and public agency thereof is
hereby authorized to acquire and hold shares of the capital stock of
any mutual water company or corporation when the stock is so acquired
or held for the purpose of furnishing a supply of water for public,
municipal or governmental purposes; and the holding of the stock
shall entitle the holder thereof to all of the rights, powers and
privileges, and shall subject the holder to the obligations and
liabilities conferred or imposed by law upon other holders of stock
in the mutual water company or corporation in which the stock is so
held.

Notwithstanding any other provisions of law or this Constitution
to the contrary, the retirement board of a public pension or
retirement system shall have plenary authority and fiduciary
responsibility for investment of moneys and administration of the
system, subject to all of the following:

(a) The retirement board of a public pension or retirement system shall have the sole and exclusive fiduciary responsibility over the assets of the public pension or retirement system. The retirement board shall also have sole and exclusive responsibility to administer the system in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries. The assets of a public pension or retirement system are trust funds and shall be held for the exclusive purposes of providing benefits to participants in the pension or retirement system and their beneficiaries and defraying reasonable expenses of administering the system.

(b) The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system. A retirement board's duty to its participants and their beneficiaries shall take precedence over any other duty.

(c) The members of the retirement board of a public pension or retirement system shall discharge their duties with respect to the system with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims.

(d) The members of the retirement board of a public pension or retirement system shall diversify the investments of the system so as to minimize the risk of loss and to maximize the rate of return, unless under the circumstances it is clearly not prudent to do so.

(e) The retirement board of a public pension or retirement system, consistent with the exclusive fiduciary responsibilities vested in it, shall have the sole and exclusive power to provide for actuarial services in order to assure the competency of the assets of the public pension or retirement system.

(f) With regard to the retirement board of a public pension or retirement system which includes in its composition elected employee members, the number, terms, and method of selection or removal of members of the retirement board which were required by law or otherwise in effect on July 1, 1991, shall not be changed, amended, or modified by the Legislature unless the change, amendment, or modification enacted by the Legislature is ratified by a majority vote of the electors of the jurisdiction in which the participants of the system are or were, prior to retirement, employed.

(g) The Legislature may by statute continue to prohibit certain investments by a retirement board where it is in the public interest to do so, and provided that the prohibition satisfies the standards of fiduciary care and loyalty required of a retirement board pursuant to this section.

(h) As used in this section, the term "retirement board" shall mean the board of administration, board of trustees, board of directors, or other governing body or board of a public employees' pension or retirement system; provided, however, that the term "retirement board" shall not be interpreted to mean or include a governing body or board created after July 1, 1991 which does not administer pension or retirement benefits, or the elected legislative body of a jurisdiction which employs participants in a public employees' pension or retirement system.

Section 18

(a) No county, city, town, township, board of education,
or school district, shall incur any indebtedness or liability in any
manner or for any purpose exceeding in any year the income and
revenue provided for such year, without the assent of two-thirds of
the voters of the public entity voting at an election to be held for
that purpose, except that with respect to any such public entity
which is authorized to incur indebtedness for public school purposes,
any proposition for the incurrence of indebtedness in the form of
general obligation bonds for the purpose of repairing, reconstructing
or replacing public school buildings determined, in the manner
prescribed by law, to be structurally unsafe for school use, shall be
adopted upon the approval of a majority of the voters of the public
entity voting on the proposition at such election; nor unless before
or at the time of incurring such indebtedness provision shall be made
for the collection of an annual tax sufficient to pay the interest
on such indebtedness as it falls due, and to provide for a sinking
fund for the payment of the principal thereof, on or before maturity,
which shall not exceed forty years from the time of contracting the
indebtedness.

(b) Notwithstanding subdivision (a), on or after the effective
date of the measure adding this subdivision, in the case of any
school district, community college district, or county office of
education, any proposition for the incurrence of indebtedness in the
form of general obligation bonds for the construction,
reconstruction, rehabilitation, or replacement of school facilities,
including the furnishing and equipping of school facilities, or the
acquisition or lease of real property for school facilities, shall be
adopted upon the approval of 55 percent of the voters of the
district or county, as appropriate, voting on the proposition at an
election. This subdivision shall apply only to a proposition for the
incurrence of indebtedness in the form of general obligation bonds
for the purposes specified in this subdivision if the proposition
meets all of the accountability requirements of paragraph (3) of
subdivision (b) of Section 1 of Article XIIIA.

(c) When two or more propositions for incurring any indebtedness
or liability are submitted at the same election, the votes cast for
and against each proposition shall be counted separately, and when
two-thirds or a majority or 55 percent of the voters, as the case may
be, voting on any one of those propositions, vote in favor thereof,
the proposition shall be deemed adopted.

Section 19

All proceedings undertaken by any chartered city, or by
any chartered county or by any chartered city and county for the
construction of any public improvement, or the acquisition of any
property for public use, or both, where the cost thereof is to be
paid in whole or in part by special assessment or other special
assessment taxes upon property, whether the special assessment will
be specific or a special assessment tax upon property wholly or
partially according to the assessed value of such property, shall be
undertaken only in accordance with the provisions of law governing:
(a) limitations of costs of such proceedings or assessments for such
proceedings, or both, in relation to the value of any property
assessed therefor; (b) determination of a basis for the valuation of
any such property; (c) payment of the cost in excess of such
limitations; (d) avoidance of such limitations; (e) postponement or
abandonment, or both, of such proceedings in whole or in part upon
majority protest, and particularly in accordance with such provisions
as contained in Sections 10, 11 and 13a of the Special Assessment
Investigation, Limitation and Majority Protest Act of 1931 or any
amendments, codification, reenactment or restatement thereof.

Notwithstanding any provisions for debt limitation or majority
protest as in this section provided, if, after the giving of such
reasonable notice by publication and posting and the holding of such
public hearing as the legislative body of any such chartered county,
chartered city or chartered city and county shall have prescribed,
such legislative body by no less than a four-fifths vote of all
members thereof, finds and determines that the public convenience and
necessity require such improvements or acquisitions, such debt
limitation and majority protest provisions shall not apply.

Nothing contained in this section shall require the legislative
body of any such city, county, or city and county to prepare or to
cause to be prepared, hear, notice for hearing or report the hearing
of any report as to any such proposed construction or acquisition or
both.

Section 20

(a) The Budget Stabilization Account is hereby created in
the General Fund.

(b) In each fiscal year as specified in paragraphs (1) to (3),
inclusive, the Controller shall transfer from the General Fund to the
Budget Stabilization Account the following amounts:

(1) No later than September 30, 2006, a sum equal to 1 percent of the estimated amount of General Fund revenues for the 2006-07 fiscal year.

(2) No later than September 30, 2007, a sum equal to 2 percent of the estimated amount of General Fund revenues for the 2007-08 fiscal year.

(3) No later than September 30, 2008, and annually thereafter, a sum equal to 3 percent of the estimated amount of General Fund revenues for the current fiscal year.

(c) The transfer of moneys shall not be required by subdivision
(b) in any fiscal year to the extent that the resulting balance in
the account would exceed 5 percent of the General Fund revenues
estimate set forth in the budget bill for that fiscal year, as
enacted, or eight billion dollars ($8,000,000,000), whichever is
greater. The Legislature may, by statute, direct the Controller, for
one or more fiscal years, to transfer into the account amounts in
excess of the levels prescribed by this subdivision.

(d) Subject to any restriction imposed by this section, funds
transferred to the Budget Stabilization Account shall be deemed to be
General Fund revenues for all purposes of this Constitution.

(e) The transfer of moneys from the General Fund to the Budget
Stabilization Account may be suspended or reduced for a fiscal year
as specified by an executive order issued by the Governor no later
than June 1 of the preceding fiscal year.

(f) (1) Of the moneys transferred to the account in each fiscal
year, 50 percent, up to the aggregate amount of five billion dollars
($5,000,000,000) for all fiscal years, shall be deposited in the
Deficit Recovery Bond Retirement Sinking Fund Subaccount, which is
hereby created in the account for the purpose of retiring deficit
recovery bonds authorized and issued as described in Section 1.3, in
addition to any other payments provided for by law for the purpose of
retiring those bonds. The moneys in the sinking fund subaccount are
continuously appropriated to the Treasurer to be expended for that
purpose in the amounts, at the times, and in the manner deemed
appropriate by the Treasurer. Any funds remaining in the sinking
fund subaccount after all of the deficit recovery bonds are retired
shall be transferred to the account, and may be transferred to the
General Fund pursuant to paragraph (2).

(2) All other funds transferred to the account in a fiscal year shall not be deposited in the sinking fund subaccount and may, by statute, be transferred to the General Fund.